Secular Stagnation Part 1 - Paul Krugman's Bicycling Problem

Ever since Larry Summers gave his game-changing speech at last autumn's IMF research conference the back-and-forth flow of arguments about secular stagnation has been almost non-stop (indeed Larry himself now has a webpage dedicated to the topic). First to dive into the swimming pool after the sounding of the starting pistol was Paul Krugman, with a series of blogposts and NYT articles (here, here, here, here, here, here, and here). These were followed/accompanied by a series of commentaries (both for and against), and then finally we got to one of the potential end points of the argument, the "negative natural interest rates for ever and ever" model produced by Gauti Eggertsson and Neil Mehrotra (here) - summarised by Krugman in his memorable "Stagnation Without End, Amen" post. A fuller bibliography of major milestones in the secular stagnation issue can be found at the foot of this post, but I'm going to eat up most of the column space here looking at just one Krugmans arguments - the one contained in Demography and the Bicycle Effect - since in many ways in goes right to the nub of the issue.

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Edward Hugh

Born in Liverpool Edward Hugh is a macroeconomist of British origin who has lived in Catalonia for over 25 years. For 20 of those years he lived and worked in Barcelona, but since 2010 he has been living in a small village near the town of Figueres.

Hugh, who studied economics at the LSE in the late sixties before going on to do Masters and Doctoral studies in Manchester, is an expert on the impact of demographic change and migratory processes on economic growth.

His work came to be known to a wider international public following the publication of a New York Times article highlighting his anticipation of the Euro Area crisis.

Since the start of the crisis Hugh has become a reference point for the international press in relation to the difficult economic situation in Spain.

He is an active blogger, and regular contributor to social network platforms like Twitter and Facebook where he is widely followed. He has no political involevment of any kind, and is proud of his reputation as an independent analyst-

In Spain he has recently published a book on the Spanish economy (¿Adios a la crisis?, Deusto 2014), and is a frequent contributor to the Barcelona press.

He is currently working on his next book - No Growth Societies - which will be written and published in English. He is also a regular speaker and participant in Forums and Economic Seminars, within and without Spain, a vocation which has taken him across Europe and the Middle East, from Brussels and Vienna, to Riga and Bergen, to Doha and Tel Aviv.